FUND FACTS Policies, Procedures & Classification Guide Fund Administrator - Kentucky AGC Self Insurers ...
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“Kentucky’s Authority in Construction Workers’ Compensation Since 1979”
FUND FACTS
Policies, Procedures & Classification Guide
Fund Administrator
Ladegast & Heffner Claims Service, Inc.
Sponsored Exclusively by:TABLE OF CONTENTS
Introduction, Trade Associations and Agents’ Advisory Committee..............Pages 2 & 3
Staff Directory................................................................................................Page 3a
Fund Member Restrictions........................................................................Page 4
Dividend and Assessment Plans................................................................Page 4a
Safety & Educational Training Program....................................................Page 4b
Uninsured Contractors...............................................................................Page 5
Volunteer Laborers....................................................................................Page 5a
Out of State Coverage & Cross-Borders Program.....................................Page 6
The Fund’s Excess Insurance....................................................................Page 7
Longshoremen’s (USL & H) Coverage.....................................................Page 8
The Fund’s Premium Discounts.................................................................Page 9
Loss Experience........................................................................................Page 10
Coverage for Sole Proprietors and Partnerships........................................Page 11
Limited Liability Companies (LLC)..........................................................Page 12
Corporations..............................................................................................Page 13
Premium Collection...................................................................................Pages 14 & 15
Included and Excluded Payroll..................................................................Pages 16 & 16a
Maintaining Adequate Records..................................................................Pages 17 & 18
Premium Final Audits................................................................................Page 19
Tips on Classifications...............................................................................Pages 20 & 21
How to Locate Classifications...................................................................Page 22
Classification Listings (Alpha order).........................................................Pages 23 - 28
Classification Descriptions (Numeric order).............................................Pages 29 - 53
Underwriting Guidelines...........................................................................Pages 54 - 56
Ownership Changes and Combination of Entities.....................................Pages 56a
Claims Filing Guide..................................................................................Pages 57 - 58
Sample Forms............................................................................................Pages 59 - 60
1 Revised 1/1/21INTRODUCTION
Since 1979, the Kentucky AGC/SIF has met the Workers’ Compensation Insurance needs of the
Kentucky Construction/Contractor Industry.
The intent of this manual is to answer any questions that you may have as well as explain
current policies and procedures of the KY AGC/SIF in the areas of Underwriting, Safety and
Claims.
After reviewing the manual, should you have any additional questions, we urge you to please
contact the Fund Office, JV Resources, or Ladegast & Heffner Claims Service, Inc. for
assistance. Also, for your convenience, a complete KY AGC/SIF and Ladegast & Heffner
STAFF DIRECTORY can be found on page 3a.
The Fund Office
Kentucky AGC/SIF
P.O. Box 436949
Louisville, Kentucky 40253-6949
(502) 245-2007 • FAX: (502) 245-6062
www.kyagcsif.com
JV Resources, Inc.
301 Middletown Park Place, Suite E
Louisville, Kentucky 40243
(502) 245-8485 • FAX: (502) 245-5625
Ladegast & Heffner Claims Service, Inc.
P.O. Box 436949
Louisville, Kentucky 40253-6949
(502) 245-8395 • FAX: (502) 245-2850
In order to further serve your needs, the following is a list of the participating TRADE
ASSOCIATIONS, the Trustee(s) and Association Executive for each, and a listing of the
Agents on the Agents’ Advisory Committee.
AGC of Kentucky
120 West State Street • Frankfort, Kentucky 40601 (Trustee - David Jackson)
P.O. Box 457 • Frankfort, Kentucky 40602 (Trustee - Doug Hacker)
(800) 456-0215
www.agcky.org (Association Executive - Richard Vincent)
AGC of Western Kentucky
2201 McCracken Blvd. • Paducah, Kentucky 42001 (Trustee - Bruce Chester)
(270) 744-6261 (Trustee - Dennis Smith)
www.agcwky.org
(Association Executive - Chris Nelson)
continued
2 Revised 1/1/21Builders Exchange of Kentucky
2300 Meadow Drive • Louisville, Kentucky 40218 (Trustee - Tom Clements)
P.O. Box 5398 • Louisville, Kentucky 40255-0398
(502) 459-9800 (Association Executive - Lynn Stetson)
www.bxkentucky.com
Home Builders Association of Kentucky, Inc.
1040 Burlington Lane (Trustee - Kyle Whalen)
Frankfort, Kentucky 40601 (Trustee - Mike Kegley)
(800) 489-4225
www.hbak.com (Association Executive - Anetha Sanford)
Kentucky Association of Highway Contractors, Inc.
119 West Broadway • Frankfort, Kentucky 40601 (Trustee - Reggie Ball)
P.O. Box 637 • Frankfort, Kentucky 40602
(502) 223-3422 (Association Executive - M. Chad LaRue)
www.kahc.org
Kentucky Association of Master Contractors
142 Consumer Lane (Trustee - David Tretter)
Frankfort, Kentucky 40601
(502) 352-2575 (Association Executive - Lynn Faulkner)
www.kaphcc.com
Kentucky Crushed Stone Association
119 W. Broadway • Frankfort, Kentucky 40601 (Trustee - Kevin Woosley)
P.O. Box 326 • Frankfort, Kentucky 40602
(502) 223-2379 (Association Executive - Nick Rodgers)
www.kycsa.org
Any information contained in this booklet is subject to change without notice by the Kentucky
AGC/SIF Board of Trustees.
3 Revised 1/1/21STAFF DIRECTORY
ADMINISTRATION: (502) 245-2007
Ladegast & Heffner - Third-Party Administrators (TPAs)
>Larry Ladegast, Jr. - Administrator
>Karl T. Ladegast - Administrator
>Chris Hickman - Assistant Administrator
>Dina Green - Assistant Administrator
AUDIT DEPARTMENT: (502) 245-2007
>Trina Haggard - Audit Manager
>Nicole Tully - Inside Audit Reviewer
>Julie Lee - Inside Audit Reviewer
>Dana Hardin - Inside Audit Reviewer
CLAIMS DEPARTMENT: (502) 245-8395
>Dina Green - Director of Claims
>Laura Ernspiker - Senior Adjustor
>Kris Goldener - Senior Adjustor
>Debbie Smith - Senior Adjustor
>Barbara Taylor - Senior Adjustor
>Desireé Payton - Adjustor
>Terri Whiting - Adjustor
>Christina Sharp - Adjustor
>Ruth Snook - Adjustor
>Alexis Janes - Lead Claims Technician
>Nancy Jaggers - Claims Technician
>Beth Stewart - Claims Technician
>Amanda Dodson - Claims Technician
>Tina Piccolo - EDI
>Donna Floyd - Settlement Specialist
PREMIUM DEPARTMENT: (502) 245-2007
>Julie Lee - Premium Coordinator
>Dana Hardin - Processor
SAFETY ENGINEERING: (502) 245-8485
>John VanDyke - President
>Lois VanDyke - Vice President
UNDERWRITING DEPARTMENT: (502) 245-2007
>Chris Hickman - Director of Underwriting
>Dana Hardin - Special Events Coordinator
>Nicole Tully - Underwriter
>Sandi Gomez - Underwriting Assistant / Membership & Safety Compliance
>Alex Howard - Account Manager
3a Revised 1/1/21FUND MEMBER RESTRICTIONS
• No prospective members are accepted with annual normal premiums under $1,000.00.
Current members with annual normal premiums under $1,600.00 must be on an annual billing
basis.
• All policies are subject to a $1,000.00 minimum yearly normal premium regardless of
paying method (annual or monthly). Policies cancelled before the end of the year expiration
date will be subject to a pro-rated minimum normal premium based on the $1,000.00 yearly
minimum normal premium times the percentage of the year the policy was effective. The
minimum premium and/or pro-rated minimum premium is not subject to an experience rating
modification.
• For a new submission, the submission must have a governing class code that is contractor related.
Any secondary exposures which may not be contractor related must be incidental to the overall
operation. For a listing of acceptable governing classifications, please contact the Fund Office or
visit the Fund’s website at: www.kyagcsif.com.
Upon acceptance into the Fund:
• New members must tender a 25% deposit before coverage begins. The deposit is based on
your normal annual premium that has been modified and discounted. This deposit is not used
as premium, but is maintained in escrow until such time the member leaves the Fund. Upon
clearance of all additional premiums due to the Fund and satisfactory compliance with all
obligations (audits after cancellation), the deposit will be returned (minus any amounts due
the Fund).
• The 25% deposit must be on account with the Fund at all times. Amounts of deposit may be
reviewed and updated on an annual basis.
• Surcharge payment: All members are required to pay a $100.00 surcharge annually. The
surcharge is collected once every calendar year. New members are required to pay the
surcharge upon acceptance into the Fund. The amount due is not proratable. The gross amount
of $100.00 is required regardless of the date in the year joined. The surcharge is not considered
premium and is not added to payments received for premium obligations.
• The date we receive the deposit check (certified or agency check) and all requested additional
information is the date coverage is bound (unless a later coverage date is requested). Coverage
cannot be bound orally, by voice mail or by e-mail. NO EXCEPTIONS! All policies
provide coverage through December 31st of each year and are automatically renewed on
January 1st. All other members are on a January 1st through December 31st policy period with
automatic renewal on January 1st or until cancellation date.
• If accepted on a monthly pay basis, the first month’s premium is due within 30 days of
acceptance.
• RETURNED CHECKS FOR DEPOSITS AND/OR PREMIUM PAYMENTS. Should your
deposit and/or premium check be returned for insufficient funds, all further checks must be
certified. Failure to comply with the aforementioned policy may result in cancellation.
4 Revised: 1/1/07KENTUCKY AGC/SIF DIVIDEND AND ASSESSMENT PLAN
DIVIDEND PLAN:
1. Determine the total amount of dividend to be paid.
2. Determine employers that are eligible for a dividend:
a. Must be current members (must be current in all of their obligations to the Fund and to
the association to which they belong).
b. Their premium exceeds their losses (paid and reserved) for the dividend year.
c. Must have been a member in the year for which the dividend is being paid.
3. Determine the sum of all eligible employers’ excesses (sum of each employer’s premiums
minus their losses).
4. Determine the DRF (Dividend Return Factor) by dividing #1 result by #3 result.
5. Determine each member’s dividend by multiplying its excess by the DRF.
6. Determine each member’s Funding Commission tax refund by multiplying the dividend by
the appropriate Funding Commission tax rate (ex: 6.5%).
7. Determine the total amount to be returned to each member by adding #5 and #6.
EX: Total Dividend to be paid = $8,500,000
Sum of all eligible employers’ excesses (premiums minus losses) = $15,000,000
DRF = 0.5667 (8,500,000/15,000,000)
Member’s excess = $5,000
Member’s dividend = $2,833.50 (0.5667 * $5,000)
Tax refund = $184.18 (assume 6.5% Funding Commission rate for dividend year)
Member’s total dividend refund = $3,017.68 ($2,833.50 + $184.18)
ASSESSMENT PLAN:
1. Determine the total amount of the assessment to be levied by Trustee Resolution.
2. Determine the loss ratio for the entire Fund for the year of the assessment. (FLR)
3. Determine each member’s loss ratio (Total Incurred/Premium). (MLR)
4. Apply the following formula to determine each member’s assessment:
(0.3+MLR)/(FLR)*(Member Premium/Total Fund Premium)* Total Assessment.
EX: Total assessment = $10,000,000
Fund loss ratio = 1.2 (120%)
Member loss ratio = .5 (50%)
Member premium = $20,000
Total Fund premium = $60,000,000
Member’s Assessment = (0.3 + .5)/(1.2)(20,000/60,000,000)(10,000,000) = $2,222.22
Ex #2: (0% loss ratio) = (0.3)/(1.2)(20,000/60,000,000)(10,000,000) = $833.33
* (Note: Both the Dividend and Assessment Plans were approved by the Kentucky Department
of Insurance in November of 2005.)
4a Revised: 1/1/12SAFETY & EDUCATIONAL PROGRAM
• The owner or officer of a new member company will be required to view the Fund’s safety video,
“Safety Saves, Safety Pays!” within 30 days of receiving it in their new member packet.
• Each Fund member with annual normal premiums of $1,000-$99,999 will be subject to one (1)
loss control review per calendar year. Each current member with annual normal premiums equal
to, or greater than, $100,000 will be subject to two (2) loss control reviews per calendar year.
Additionally, an OWNER/OFFICER/SAFETY OFFICER will be required to sign off on the
results of their company’s respective loss control review.
Should a loss control review yield a deficiency in programming, training or on a jobsite, the
member may be required to complete a program called P.R.O.P.T. (Professional Review Of
Programming & Training).
• Each Fund member who has a loss ratio of equal to, or greater than, the predetermined loss ratio
established annually by the Fund pursuant to the Watch List, and who receives one (1) of the
following;
1. Regular Warning Letter
2. Shock Loss Warning Letter
shall be required to complete a continuing education program called P.R.O.W.L. (Personal
Review Of Watch List), but not more than once per calendar year.
*Failure to comply with any (one) of the requirements listed above may result in termination of workers’
compensation insurance through the Fund.
4b Revised 1/1/17UNINSURED CONTRACTORS
The Kentucky AGC/SIF charges premium on uninsured contractors (includes independent
contractors, subcontractors, contract/casual labor, as well as sole proprietorships and
partnerships with no employees) who have not provided our member with a Certificate of
Workers’ Compensation Insurance for the period worked. There are no waivers, Form-4’s or
other contractual agreements that can be submitted that are acceptable to the Fund. See your
policy, Part Five-Premium, Section C, #2 located on page 6 or Endorsement #2 for additional
details.
Premium Computation for Uninsured Contractors
If the member does not provide satisfactory evidence that the uninsured contractor had workers’
compensation insurance in force covering the period the work was performed, additional
premium shall be charged as follows:
The full contract price will be used for premium computation purposes unless:
1) A complete payroll record of the employees of the uninsured contractor is provided. If
provided, the actual payroll will be based on the classifications which would have applied
if the employees of the contractor had been employees of the member. Note: Contractors
working for your uninsured contractors are not automatically covered under your
Kentucky AGC/SIF Workers’ Compensation policy. Please contact the Fund Office for
clarification if needed.
2) If invoices submitted to the member from the uninsured contractor disclose that a definite
amount of the full contract price represents payroll, such amount shall be the payroll for
the additional premium computation. In contracts for labor and material, the payroll shall
not be less than 50% of the contract price. Invoices must be on the contractors own
letterhead, providing actual breakdowns. Only actual invoices are acceptable, not letters
stating or estimating material costs. Estimated percentage breakdowns are not acceptable.
Additional premium will be based on the classifications which would have applied if the
employees of the uninsured contractor had been employees of the member.
3) If an experience modification factor has been established for the member, such experience
modification factor shall be applied to the premium developed for the uninsured contractor.
IMPORTANT: If your company hires a contractor from out-of-state, a certificate of insurance
from the contractor must specify coverage for the state of Kentucky (if the work was performed
in Kentucky). If not, the contractor will be treated as an uninsured contractor.
5 Revised 1/1/16VOLUNTEER LABORERS
All Volunteer Laborers may be eligible for workers’ compensation insurance benefits if
a work-related injury occurs. Therefore, payroll must be reported and premium paid on
Volunteer Laborers based on the average wages paid to your regular employees who perform
similar or like work.
Please contact the Fund Office should you have any questions regarding Volunteer Laborers.
5a Revised: 1/1/05OUT-OF-STATE COVERAGE
Since January 1, 1994, the Kentucky AGC/SIF has afforded Out-of-State Workers’
Compensation Coverage for its members without the 30-day limit imposed in prior
years but with the continuing requirement that its members must use Regularly Employed
Kentucky Employees, with no exceptions. The Kentucky AGC/SIF is interested in providing
Workers’ Compensation coverage to companies with regularly employed Kentucky employees.
The definition of a Regularly Employed Kentucky Employee is as follows:
An employee who is a resident of Kentucky and/or employed by a resident
Kentucky employer or is hired from a resident Kentucky union hall and performs
work within the scope of said employment for said employer for a minimum period
of eight (8) hours in the Commonwealth of Kentucky prior to performing any
work in any other state, with said period evidenced by payroll records from said
employer. This statement shall not conflict with KRS 342.670 (1) (a,b,c, or d).
Should you perform work outside the state of Kentucky, please contact your agent and/or the
state in which you will be working to determine applicable coverage requirements. If your work
outside the state of Kentucky requires you to have a policy for that respective state, the Fund
may be able to provide a solution through its Other States (Cross-Borders) Coverage Program.
OTHER STATES (CROSS-BORDERS) COVERAGE
The Kentucky AGC/SIF partners with the Safety National Casualty Corporation (SNCC) to
provide coverage options for exposures in other states (Note: The Kentucky AGC/SIF continues
to provide out-of-state coverage for its members who use Regularly Employed Kentucky
Employees in states where the Kentucky AGC/SIF is permitted to do so.).
To obtain access to the Other States (Cross-Borders) Coverage Program, the following general
underwriting criteria must be met:
• Must be a current member of the Kentucky AGC/SIF (or plan to join)
• Class codes contemplated by the program must be the same as those class codes
contemplated by the member's Fund policy (Note: some classes are prohibited -
contact the Fund Office for details)
• Members must have a loss ratio of < 60% for the past three (3) years (exceptions may
be considered on a case-by-case basis)
• Designated states only
• Limited out-of-state exposure (generally 40% or less of total annualized payroll)
To begin procuring a quote for the Other States (Cross-Borders) Coverage Program, the
following information will be needed:
• ACORD application (Completed in its entirety)
• Detailed description of the job or work being performed out-of-state
• Proposed effective date
• Estimated payroll by class code
• Three years of Kentucky and applicable out-of-state experience
• Large loss details on all losses over $50,000
• Current NCCI workers’ compensation Experience Modification Factor Worksheet (if
applicable)
• Loss control report for the most recent inspection
6 Revised: 1/1/21THE FUND’S EXCESS INSURANCE
The Kentucky AGC/SIF purchases Statutory Excess insurance to protect it from specific
catastrophic losses and Employers’ Liability with four and a half million dollars per occurrence
with no aggregate limit. This, in effect, guarantees the Fund a stop loss threshold for specific
occurrences in a given year and generally satisfies the underlying limit requirements of most
umbrella carriers for employers’ liability.
7 Revised: 1/1/21LONGSHORE AND HARBOR
WORKERS’ COMPENSATION
COVERAGE
Since January 1, 1997, the Fund has afforded Longshore and Harbor Workers Coverage (also known
as: Longshoremen’s or USL & H coverage) for those Fund Members with
> INCIDENTAL EXPOSURE ONLY <
For purposes of this limited scope of coverage, the Fund defines an “incidental exposure” as: A
work-related exposure comprising no more than 10% of the total annualized payroll for the policy
year in which the exposure exists.
Please be advised that incidental USL & H exposures require prior approval by the Fund’s Excess
Carrier. For more information regarding USL & H Coverage please contact the Fund Office for details.
8 Revised: 1/1/13FUND DISCOUNTS
Fund members are automatically entitled to a premium volume discount if their annual modified
premium exceeds $3,000.00 as shown below:
STANDARD PREMIUM DISCOUNT
$ 0 - $3,000 0 %
3,001 - 4,000 1
4,001 - 5,000 2
5,001 - 6,000 3
6,001 - 7,000 4
7,001 - 8,000 5
8,001 - 9,000 6
9,001 - 10,000 7
10,001 - 11,500 8
11,501 - 13,000 9
13,001 - 15,000 10
15,001 - 17,500 11
17,501 - 20,000 12
20,001 - 22,500 13
22,501 - 25,000 14
Over 25,001 15
At the beginning of each year (or at policy inception), annual and estimated billings are provided
with ESTIMATED DISCOUNTS based on payroll estimates. The final audit determines ACTUAL
discounts afforded as the estimated discount is adjusted according to the above schedule.
New Members who join the Fund after 1/1 of each year:
The discount as applied to this policy is based on an estimated twelve (12) months of payroll and
premium. The discount is adjusted to the level of estimated normal premium for the pro-rated
twelve (12) month policy, which expires on 12/31 despite the effective date. (Please note that all
Kentucky AGC/SIF policies expire on 12/31 and automatically renew on 1/1.) The final audit
determines ACTUAL discounts afforded as the estimated discount is adjusted according to the
above schedule. This policy has remained unchanged since the Fund’s inception. (Any policy to
which a 150% “Adder” has been applied to the experience mod will not be eligible for a premium
discount until such time as the member company’s final payroll audit (year-end or cancellation) is
completed. Upon completion of the final audit, the premium discount will be reinstated but
determined only by the modified premium for the time period in which the adder was not in effect.
9 Revised: 1/1/05LOSS EXPERIENCE
The Kentucky AGC/SIF’s Watch List was amended effective 9/30/2003. The Watch List is
generated on a calendar quarter basis and is used to identify Fund members with Adverse
Experience.
Adverse Experience is defined as a loss ratio of equal to, or greater than, a predetermined loss
ratio which is established annually by the Fund.
Loss Ratio is defined as total incurred losses (paid and reserved) divided by earned normal
premiums.
To identify adverse experience, the loss ratio is calculated using the most recent five (5) years
of losses and premiums, or since the coverage effective date, whichever is less, with the current
year’s premium being pro-rated through the end of the current year.
The Fund’s Watch List contains a “Shock Loss” provision defined as a single loss occurrence
that does not exceed $200,000 total incurred (claims paid + reserved amounts) and which if
removed, would make the five (5) year loss ratio less than the predetermined loss ratio. If further
loss ratio deterioration occurs due to increased totals incurred and subsequent to the shock loss,
or the single loss occurrence exceeds a total incurred of $200,000, either of which results in an
increased overall loss ratio, consideration for a shock loss is removed and regular Watch List
actions are applicable.
If the trigger loss ratio (determined annually by the Fund) is reached or exceeded, the following
actions will occur based upon the member’s overall loss ratio since the policy inception date or
1987, whichever is less:
Overall loss ratio of 0 - 80%: Regular Warning Letter or Shock Loss Warning Letter sent to
member.
Overall loss ratio of 81% - 90%: 150% Adder is applied to e-mod and any premium discount
is removed for the period in which the adder is in effect. Exception is shock loss provision.
Overall loss ratio of greater than 90%: Cancellation of the workers’ compensation policy for
continued adverse claims. Exception is shock loss provision.
10 Revised: 1/1/04COVERAGE FOR SOLE PROPRIETORS AND
PARTNERSHIPS
SOLE PROPRIETORSHIPS and PARTNERSHIPS: The owner/partners are not included
for premium computations and are not covered under the policy. If coverage is desired, an
ORIGINAL ELECTION NOTICE must be filled out and submitted to the Fund Office to afford
coverage. If this coverage is elected, the premium will be based on a flat standard payroll amount
of $46,300 (2021) for the owner or for each partner who elects coverage. This flat payroll amount
is used regardless of the actual amount paid to you by your company. To rescind a previous
election, the insured must complete and submit an ORIGINAL NOTICE TO RESCIND
ELECTION to be excluded from coverage. Either notice is only valid once received in the Fund
Office and can not be backdated.
Please Note: The Flat Standard Payroll Amount is provided annually by the National Council on
Compensation Insurance (NCCI), and adopted by the State of Kentucky. If there are questions
concerning the current year’s flat payroll amount, please call the Fund Office.
IMPORTANT: If your company changes its entity status (i.e. change from a partnership to a
corporation), CONTACT THE FUND OFFICE IMMEDIATELY. Failure to do so could result
in additional premiums being assessed for officers who did not want to be covered under this
policy.
11 Revised 1/1/21LIMITED LIABILITY COMPANIES (LLC’S)
Members are NOT COVERED AUTOMATICALLY. For members to be covered, an
ORIGINAL ELECTION NOTICE must be filled out and submitted to the Fund Office.
If this coverage is elected, charges will be the same as the preceding page concerning Sole
Proprietorships and Partnerships.
IMPORTANT: If your company changes its entity status, CONTACT THE FUND OFFICE
IMMEDIATELY. Failure to do so could result in additional premiums being assessed for officers
who did not want to be covered under this policy.
12 Revised: 1/1/04CORPORATIONS
(INCLUDING SUB-CHAPTER S and OTHER TYPES)
If your company is incorporated, the officers of the corporation are employees of that company
and are included for coverage and premium development. The minimum and maximum payroll
that can be used for premium computation purposes for 2021 are:
Minimum: $900/week or $46,800/year (amounts change yearly)
Maximum: $3,600/week or $187,200/year (amounts change yearly)
If you are on a monthly reporting basis, begin excluding payroll on your monthly reports for
officers after they receive $187,200 in the year.
Instructions for Officers Written Notice of Rejection or “Form - 4”
Pursuant to KRS 342.395, a Rejection Notice does not become effective until the original of
the Form 4 is received and accepted for filing by the Department of Workers’ Claims. The only
way for an officer to reject workers’ compensation coverage is by the use of the Form 4. The
mailing address is: Department of Workers’ Claims, ATTENTION: Enforcement Branch,
Prevention Park, 657 Chamberlin Avenue, Frankfort, KY 40601. Also, please send a copy
to the Fund Office.
The employer must keep file copies of all Rejection Notices signed by current officers. The
Department of Workers’ Claims has the authority to conduct an investigation at any time.
To be accepted by the Department of Workers’ Claims, a Form 4 must be complete in all respects
and the date of the officer’s signature and the date of the notary’s signature must be the same.
An officer has the right to withdraw the rejection of coverage by notifying the employer of his or
her decision to withdraw the rejection. A Form 5 must be filed with the Department of Workers’
Claims. Please notify the Fund Office of this change so we may verify the date of filing.
IMPORTANT: If your company changes its entity status, CONTACT THE FUND OFFICE
IMMEDIATELY. Failure to do so could result in additional premiums being assessed for officers
who did not want to be covered under the policy.
FORM 4 - EMPLOYEE REJECTION NOTICES
As a reminder to all Kentucky AGC/SIF Members and Participating Agents, the Fund charges
premium on ALL employees and does NOT accept: Form 4s (Written Notice of Rejection of the
Workers’ Compensation Act), waivers, or any other contractual agreements that may suggest
a waiver of the Workers’ Compensation Act for employees. Additionally, Form 4s are ONLY
recognized for Officers or Owners of a company and when filed correctly. (Please note that a Form
4 Rejection Notice does not become effective until the original of the Form 4 is received from the
employer and accepted for filing by the Department of Workers’ Claims.)
If you are not currently reporting payroll for an employee in which a Form 4 or other waiver has
been filed, please take prompt action to report said payroll in order to avoid any unnecessary
differences upon the completion of the year - end Final Payroll Audit.
Please note that the above policy has remained unchanged since the inception of the Kentucky
AGC/SIF in 1979.
Should you have any questions regarding any of the above information, please contact the
Kentucky AGC/SIF Office ( *502* 245-2007 ) at your convenience.
13 Revised: 1/1/21PREMIUM COLLECTION PROCEDURES &
MONTHLY INTERIM PAYROLL REPORTS
If your premium is paid on an ANNUAL basis, you are required to pay the total annual premium
by the 10th of February each year. You can pay your total annual premium bill online by
electronic check or credit card at www.kyagcsif.com.
If your premium is paid on a MONTHLY basis, you will file monthly reports based upon your
prior month’s payroll figures. You can file your monthly reports and pay your monthly premium
online by electronic check, credit card or mail-in (mail-in allows you to file your monthly report
online, but send in a check).
If you should choose to pay your annual or monthly premiums by check, please make checks
payable to KY AGC/SIF and mail to PO Box 436949, Louisville, KY 40253-6949. Please include
your policy number with any correspondence.
10th of each month - payroll report and payment due for previous month’s payroll. If you have
no payroll, a monthly report must be filed showing zero payroll and premium due.
20th of each month - if payroll report and payment due have not been received, a delinquent
notice will be issued to the member.
27th of each month - if payroll report and payment due have not been received in the Fund
Office, a thirty (30) day CANCELLATION NOTICE will be sent to the member.
Members who do not pay their monthly payments on time result in increased business expenses
to the Fund. To help maintain current rates, please pay promptly!
Overtime
Figure workers’ compensation premium due on all overtime hours worked at the straight time
rate.
COMPLETING MONTHLY PAYROLL REPORTS:
The easiest and most convenient method to complete your monthly payroll reports is file
them online. Register at www.kyagcsif.com.
If you choose to manually complete monthly payroll reports, please follow the steps below:
1. Enter payroll amount in column 3 for each code and classification.
2. To calculate premium, take Payroll X Rate equals Premium (an easy way to do this as the rate
is per $100.00 of payroll is to move the decimal point of the payroll over two (2) places to the
left and then multiply it by the rate).
3. Add the premium column down, this will be the “Total Manual Premium”.
4. The next step is to multiply the Total Manual Premium by the Experience Modification. One
of the following three examples will apply:
continued
14 Revised: 1/1/12• If the Exp. Mod. is a 1.00, the Total Manual Premium and the Total Standard Premium will be
the same.
• If the Exp. Mod. is more than a 1.00, multiply the Total Manual Premium by the Exp. Mod. Do
not add or subtract this amount, the figure calculated is what the Total Standard Premium is
and should be greater than the Total Manual Premium.
• If the Exp. Mod. is less than a 1.00, multiply the Total Manual Premium by the Exp. Mod. Do
not add or subtract this amount, the figure calculated is what the Total Standard Premium is
and should be less than the Total Manual Premium.
Discount: If a discount applies, multiply the Total Standard Premium by the discount rate to get
the Total Normal Premium.
KY Assessment Tax: The KY Assessment Tax is determined annually by the KY WC Funding
Commission. Please refer to your Estimated or Annual Billing for the current rate.
If the Total Amount Due and the amount of the check are not the same, please explain why
there is a difference so that we may process your account accordingly.
PLEASE NOTE: MONTHLY REPORTING IS A PAYMENT PLAN ONLY. The amount
of payroll reported, use of classifications, and assignment of employees, casual laborers, or
uninsured subcontractors to classifications are subject to change at audit.
15 Revised: 1/1/12WHAT IS TO BE INCLUDED AND EXCLUDED ON
PAYROLL REPORTS
The following list of items are to be included when reporting payroll:
Gross payroll including:
1) Wages or salaries including retroactive wages or salaries.
2) Total cash received by employees for commissions and draws against commissions.
3) Bonuses including stock bonus plans.
4) Pay for holidays, vacations, or periods of sickness.
5) The rental value of an apartment or a house provided for an employee based on comparable
accommodations.
6) Payments to employees on any basis other than time worked, such as piece work, profit sharing
or incentive plans.
7) The value of lodging, other than an apartment or a house as in (5) above, provided as a part of
pay.
8) The value of meals received by employees as a part of pay to the extent shown in the payroll
records.
9) Payment by an employer of amounts that would have been withheld from employees to meet
statutory obligations for insurance or pension plans such as the Federal Social Security Act or
Medicare.
10) Payments for salary reduction, employee savings plans, retirement or cafeteria plans
(IRC 125) which are made through employee-authorized salary reductions from the
employee’s gross pay.
11) Davis - Bacon wages or wages from a similar prevailing wage law paid to employees as listed
in their gross pay before deductions. (Prevailing wages)
12) Annuity plans.
13) The value of store certificates, merchandise, credits or any other substitute for money received
by employees as part of their pay.
The following list of items are to be excluded when reporting payroll:
1) Tips and other gratuities received by employees.
2) Payments by an employer to group insurance or group pension plans for employees. (These
payments would not show up in the employee’s gross payroll before deductions.)
3) Dismissal or severance payments except for time worked or accrued vacation.
4) Payments for active military duty.
5) Expense reimbursements to employees to the extent that an employer’s records substantiate
that the expense was incurred as a valid business expense.
6) Supper money for late work.
7) Work uniform allowances.
continued
16 Revised: 1/1/138) Sick pay paid to an employee by a third party such as an insured’s group insurance carrier
which is paying disability income benefits to a disabled person.
9) Employer provided perquisites (“perks”) such as:
a) An automobile.
b) An airplane flight.
c) An incentive vacation (i.e., contest winner).
d) A discount on property or services.
e) Club memberships.
f) Tickets to entertainment events.
10) Premium Overtime (See page 14 - Overtime section).
11) Payments by an Employer into third-party pension trusts for the Davis-Bacon Act or a
similar prevailing wage law may be excluded, provided the pension trust is qualified under
IRC Sections 401(a) and 501(a). Note: 401(k) and IRC 125 plan contributions by
EMPLOYEES are still INCLUDED for premium computations.
If there is ever any question if an item is to be included or excluded, please contact the Fund
Office.
16a Revised: 1/1/13MAINTAINING ADEQUATE RECORDS
Premium savings can be obtained by way of proper record keeping. For construction or erection
companies, the payroll of an individual employee may be divided and allocated to more than one
classification (subject to the rules and limitations of each individual classification). If payroll
records are not maintained providing these divisions, payroll for these employees must be
assigned to the highest rated classification representing any part of their work.
Another example of premium savings through proper record keeping would be the exclusion
of premium overtime. Records should be maintained to show premium overtime by individual
and/or classification. If overtime is not properly maintained in your records, this deduction
cannot be used.
Thus, it is very important to maintain adequate records. Some examples of the records needed
to be maintained for the premium audit include but are not limited to:
• Payroll journals or other type records: Proper records will maintain gross payroll by
company, individual, and classification. Overtime will be maintained providing a year to
date breakdown by classification and/or employee. Other deductions will be separated in the
records for deduction by the auditor. (Examples are: Tips for restaurants, hand tools allowances,
automobile allowances, among others.) If the records do not indicate these separations, these
deductions cannot be allowed. Consequently, if classification payroll breakdowns are not
maintained, all payroll is assigned to the highest rated classification on your policy. Estimated
payroll breakdowns are not acceptable to the Fund.
• Quarterly Federal & State Wage Reports (If filed by your company): Should be provided
to the auditor at the time of the audit. Auditors must verify gross payroll by way of a second
source of records other than journals or other type of records. If there is a discrepancy between
the audited records and Quarterly reports, the auditor will, on some occasions, use a third
source of records to determine the gross payroll of your company or an individual’s payroll.
Some examples of a third source for payroll verification could be: W-2’s and W-3’s, 1040
Federal Tax Returns, Corporate Tax Returns, among others.
• Cash Disbursements Journals: Used by the auditor to: 1) verify payroll amounts if other
records are not maintained or available, and 2) used to procure and/or verify payments made to
contract or casual laborers. Contract or casual labor is chargeable for Workers’ Compensation
purposes. A number of claims are filed by these laborers every year and premium must be
developed for this exposure. If cash disbursements journals are not maintained by your
company, other examples of records the auditors might request are: check book registers,
1099’s, 1096’s, etc.
• Subcontractor Costs and Certificates of WC Insurance: A yearly summary for
subcontractors should be maintained providing the following information:
- Name, total contract cost, and type of work performed for each subcontractor, monthly if
possible.
- Certificates of Insurance (COI) for Workers’ Compensation coverage. If the subcontractor
does not have coverage, invoices (on the subcontractor’s own letterhead) providing materials/
labor breakdowns should be provided to the auditor. A good rule all companies should
implement is: Certificates of Insurance should be on file before a subcontractor begins the
job. If they are uninsured, bills providing a materials/labor breakdown should be procured.
Obtaining Certificates of Insurance will avoid any surprises at audit time and protect your
company if an unfortunate accident were to occur.
continued
17 Revised: 1/1/11• For other information pertaining to the charging of uninsured subcontractors, please see
the uninsured subcontractor section of this manual.
• Please note: If you are on a monthly reporting basis: Your monthly reports do not constitute
adequate records for classification breakdowns. Auditors will develop payroll from the
records you used to develop the amounts on your monthly reports. Records other than the
monthly payroll records must be maintained or all payroll will be placed in the highest rated
classification.
18 Revised: 1/1/12PREMIUM AUDITS
A premium audit will be conducted on every member yearly with the exception of the following
members:
• New members who joined the Fund after December 15
New members who join the Fund between 11/1 - 12/15 will be subject to either a voluntary
(mail) audit or a physical audit at the discretion of the Audit Department.
Audits for the preceding year begin in February of each year. Due to the number of members,
audits are usually not completed until October. This is due to all policies having an ending date
of December 31.
Cancellation audits: For those members who leave the Fund, a cancellation audit will be
conducted for the portion of the year the former member was in the Fund. This will be conducted
as soon as possible after the cancellation date, but no less than 45 days after cancellation.
Audit discrepancies: A Final Audit Invoice will be mailed to the member after the audit has
been reviewed and/or corrected by our internal audit review staff. Any discrepancies MUST be
reported to the Fund Office (by mail, fax, phone or e-mail) no later than 10 days after the invoice
date. Discrepancies will be reviewed and/or corrected as soon as possible. If a reaudit becomes
necessary, the Fund Office or an auditor will contact you to arrange an appointment. If no changes
can be made to the Final Audit Invoice, you will be contacted by phone or letter. Please pay the
invoice promptly after the discrepancy is corrected. Any discrepancies reported after 10 days
of the audit invoice date may not be considered for review, and further changes will be at the
discretion of the Audit Department.
Premium audits adjust your final premium due. The following are examples of changes that can
be made at audit:
• Overpayment of premium during the policy period.
• Underpayment of premium during the policy period.
• Incorrect classification usage.
• Individual employees mis-assigned to classifications.
• Uninsured subcontractors used but not reported.
• Contract or casual laborers used but not reported.
• Additional classifications added due to work performed during the period.
• Under reporting of payroll on monthly reports (if on a monthly reporting basis).
• Estimated discount factor adjusted to correct premium for the period.
Refunds: If the premium audit results in a refund due to your company, a Final Audit Invoice
will be sent indicating the amount of refund due. Refund checks are usually mailed within thirty
days after the audit has been processed. No refund checks will be processed until all outstanding
audits have been satisfied.
19 Revised: 1/1/10TIPS ON CLASSIFICATION
Abbreviations and trade terms used
NPD - No payroll division
NOC - Not otherwise classified
Governing Classification - The classification other than a standard exception classification that
produces the greatest amount of payroll.
Standard Exception Classifications are:
(a) Clerical - Code 8810
(b) Drafting - Code 8810
(c) Drivers, chauffeurs, messengers and their helpers - Code 7380
(d) Salespersons or collectors - outside - Code 8742
Employees within the definition of a Standard Exception Classification are not included in a basic
classification unless the basic classification specifically includes those employees.
Classifying miscellaneous employees
The NCCI Manual provides the following definition for miscellaneous employees:
“Miscellaneous employees are those who perform duties conducted in common for separate
operations which are subject to more than one basic classification. The payroll of any
miscellaneous employees shall be assigned to the classification with the majority of payroll
(governing classification). Such employees include general superintendents, maintenance or
power plant employees, shipping or receiving clerks and yard workers.” Janitors, who clean
your office or building, are also considered miscellaneous employees and are assignable to the
governing class.
Interchange of labor
Some employees who are not miscellaneous employees, may perform duties directly related to
more than one classification. An example is an employee who from time to time interchanges
between operations subject to more than one classification. When there is such an interchange
of labor, the entire payroll of employees who interchange shall be assigned to the highest rated
classification representing any part of their work. An exception to this is: For construction,
erection, stevedoring or part time aircraft operations (in connection with Code 7421), the
payroll of an individual employee may be divided and allocated to more than one classification
(unless specifically prohibited by the individual classes the work was performed in), provided
proper records providing the payroll breakdowns are maintained. AN ESTIMATED OR
PERCENTAGE ALLOCATION OF PAYROLL IS NOT PERMITTED.
The following classes MUST be specifically accepted by the KY AGC/SIF:
A. 0106 - Tree Pruning, Spraying, Repairing - All Operations & Drivers
B. 1164 - Mining NOC - Not Coal - Underground & Drivers
C. 1624 - Quarry - NOC & Drivers
D. 1710 - Stone Crushing & Drivers
E. 1803 - Stone Cutting or Polishing NOC & Drivers
F. 3726 - Boiler Installation or Repair - Steam
G. 5037 - Painting - Metal Structures - Over Two Stories in Height & Drivers
H. 5040 - Iron/Steel Erection - Frame Structures
I. 5057 - Iron/Steel Erection - NOC
J. 5059 - Iron/Steel Frame Erection - Frame Structures Not Over Two Stroies in Height
[___]
continued
20 Revised: 1/1/18K. 5160 - Elevator Erection or Repair
L. 5222 - Concrete Construction in connection with Bridges or Culverts
M. 5551 - Roofing - All Kinds & Drivers
N. 5610 - Cleaners - Debris Removal
O. 5703 - Building Raising or Moving
P. 6003 - Pile Driving
Q. 6204 - Drilling NOC & Drivers
R. 6252 - Shaft Sinking - All Operations
S. 7421 - Aviation - Transportation of Personnel In Conduct of Employer’s Business - Flying Crew
T. 7538 - Electric Light or Power Line Construction & Drivers
U. 7600 - Telecommunications Co. - Cable TV, or Satellite - All Other Employees & Drivers
The above class codes may NOT be added to your policy until Special Acceptance has been
granted by our Excess Carrier. Call the Fund Office for details.
Class 7380 - Drivers
Demands careful attention. If any other classification on your policy reads “and drivers,” class
7380 cannot be used and the payroll goes into the classification that includes drivers.
Superintendents and Foremen
Those employees who provide direct supervision of the employees at the job site DO NOT
qualify for class 5606 - Executive Supervisor. Payroll shall be applicable to the proper
construction classification.
21 Revised: 1/1/16HOW TO LOCATE CLASSIFICATIONS
Classifications are indexed alphabetically on pages 23-28. Once you have found the classification
you need, then determine its Code number. You may then locate a description of the classification
by using the Code number as a reference guide since all classifications are listed in numerical
order by Code number.
IN NEED OF A RATE???
Should you be in need of a rate for a particular class code, please contact the KY AGC/SIF
Office at (502) 245-2007 or visit our website at: www.kyagcsif.com.
22 Revised: 1/1/06Alphabetical Listing of Classification Descriptions
Acoustical ceiling installation......................................................................................... 5020
Air conditioning installation & service (Non-portable units) ......................................... 5537
Air conditioning installation and service-portable units only.......................................... 9519
Aluminum paneling or sheet metal facing/erection......................................................... 5535
Aluminum or Vinyl Siding Installation:
Residential Dwellings < 3 Stories in Height............................................................ 5645
All other buildings or structures.............................................................................. 5403
Architectural or Engineering Firm - Clerical................................................................... 8603
Architect or engineer, consulting only............................................................................. 8601
Asphalt workers & Drivers.............................................................................................. 1463
Auctioneers & salespersons, solicitors & Drivers........................................................... 8017
Automatic sprinkler installation & Drivers..................................................................... 5188
Automobile salespersons................................................................................................. 8748
Auto sales, service & Drivers.......................................................................................... 8380
Aviation - Flying Crew.................................................................................................. 7421
Awning erection, removal or repair & Drivers - canvas or vinyl fabric.......................... 5102
Awning erection or repair & Drivers - metal................................................................... 5535
Boiler Installation or Repair-Steam............................................................................. 3726
Boiler or steam pipe insulating & Drivers....................................................................... 5183
Brick cleaning................................................................................................................. 5022
Brick or Brick Veneer Installation................................................................................... 5022
Bridges - Concrete......................................................................................................... 5222
Bridges - Iron or steel - erection................................................................................... 5040
Bridges - Wood................................................................................................................ 5403
Buildings - NOC - Operations by owner or lessee.......................................................... 9015
Building or Property Management -
Property Managers, Leasing Agents, Clerical & Salespersons............................... 9012
Building material dealer (new material): Store employees.............................................. 8058
All other employees & yard, warehouse & Drivers................................................. 8232
Building material yards - Secondhand materials............................................................. 8204
Building Raising or Moving.......................................................................................... 5703
Burglar and Fire Alarm Installation or Repair & Drivers................................................ 7605
Cabinet Works - with power machinery.......................................................................... 2812
Carpentry - Cabinet or interior trim installation, wooden floors..................................... 5437
Carpentry - Construction of Residential Dwellings < 3 Stories in Height ..................... 5645
Carpentry - Shop only & Drivers.................................................................................... 2802
Carpentry - NOC (includes commercial structures)........................................................ 5403
Carpet Installation .......................................................................................................... 5478
Carpet, Rug, or Upholstery Cleaning & Drivers............................................................. 2585
Ceiling Installation - Suspended Acoustical Grid Type................................................... 5020
Ceramic Tile Work - inside of buildings......................................................................... 5348
Ceramic Tile Work - outside of buildings........................................................................ 5022
Chimney Construction - not metal (commercial or industrial).................................. 5222
BOLD FACE CODES indicate the need for SPEClAL ACCEPTANCE by the Underwriting
Department and Excess Carrier. Please contact the Fund Office for more information.
23 Revised: 1/1/16Chimney Construction - Residential................................................................................ 5022
Claims adjusters or special agents, insurance company.................................................. 8742
Cleaners, Watchmen & timekeepers (see description for use)................................... 5610
Cleaning or Renovating Building exteriors & Drivers.................................................... 5213
Clerical Office Employees (must meet description requirements)................................... 8810
Clothing Mfg................................................................................................................... 2501
Collectors or Salespersons - Outside (see description).................................................... 8742
Concrete - in connection with Bridges or Culverts..................................................... 5222
Concrete Construction NOC............................................................................................ 5213
Concrete or cement work - Driveways, yards
or sidewalks & Drivers - Includes asphalt driveways.............................................. 5221
Concrete - All concrete work incidental to construction of
one or two family dwellings.................................................................................... 5215
Concrete swimming pools............................................................................................... 5223
Concrete Products Mfg. & Drivers.................................................................................. 4034
Concrete - Ready Mix Dealers & Drivers ...................................................................... 8232
Conduit Construction & Drivers...................................................................................... 6325
Construction or Agriculture Machinery Mfg................................................................... 3507
Contractor Executive Supervisor (Must meet description requirements)........................ 5606
Contractors Machinery Dealer NOC - Store or yard & Drivers...................................... 8107
Contractors Permanent Yard............................................................................................ 8227
Conveyor Mfg................................................................................................................. 3507
Crane and Hoisting Service Contractor
All operations, including yard employees & Drivers.............................................. 9534
Cultured Marble Products Mfg. - Sinks, etc................................................................... 4036
Cutlery Mfg. NOC........................................................................................................... 3114
Demolition: Buildings or Structures - Not Marine...................CALL THE FUND OFFICE
Door, Door Frame or Sash Erection - Metal or Metal Covered....................................... 5102
Door Mfg. (wood) & Drivers.......................................................................................... 2802
Drafting Employees......................................................................................................... 8810
Drainage or irrigation system construction & Drivers - includes excavation work......... 6229
Drilling NOC & Drivers................................................................................................ 6204
Drivers, chauffeurs, messengers & helpers, NOC (cannot be used if another
class on the policy includes Drivers)..................................................................... 7380
Electrical apparatus Mfg. - NOC..................................................................................... 3179
Electrical apparatus installation or repair & Drivers....................................................... 3724
Electrical Line Construction & Drivers....................................................................... 7538
Electrical Wiring within Buildings & Drivers................................................................. 5190
Electronic Equipment - Installation, Service or Repair - Shop and Outside & Drivers... 9516
Elevator Erection or Repair.......................................................................................... 5160
Emery Works & Drivers.................................................................................................. 1747
Engineer or Architect - Consulting only.......................................................................... 8601
Engraving........................................................................................................................ 4352
Erection - Exterior metal, frame structures two stories or less................................. 5059
Erection - Exterior metal, frame structures over two stories,
bridges (iron or steel)............................................................................................. 5040
Erection, Iron or Steel NOC......................................................................................... 5057
Excavation NOC & Drivers............................................................................................. 6217
BOLD FACE CODES indicate the need for SPEClAL ACCEPTANCE by the Underwriting
Department and Excess Carrier. Please contact the Fund Office for more information.
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